How SVOD works
A viewer signs up for a plan, often after a free trial, and is billed automatically each period until they cancel. While the subscription is active they can watch anything in the plan's catalog as often as they like.
Services usually offer several plans that differ by price, video quality, number of simultaneous streams or whether ads are shown.
The metrics that decide an SVOD business
For example, a $6 plan with 5% monthly churn has a lifetime value of about $120 per subscriber. If acquiring that subscriber costs more than that, growth loses money.
- Monthly recurring revenue (MRR): active subscribers multiplied by average price
- Churn rate: the share of subscribers who cancel each month
- Customer acquisition cost (CAC): what it costs to win one subscriber
- Lifetime value (LTV): average revenue per subscriber divided by churn
When SVOD is the right model
- Your catalog is deep enough, or refreshed often enough, to be worth paying for every month
- Your audience is loyal to a niche, a language or a creator
- You want predictable recurring revenue rather than one-off sales
SVOD vs AVOD vs TVOD
SVOD charges a recurring fee for a whole catalog. AVOD is free to the viewer and earns from advertising. TVOD charges once for a single title, as a rental or a purchase. Many services pair SVOD with an ad-supported tier to reach viewers who won't subscribe, and with rentals for new releases.
Last reviewed